Apple on Monday commented that demand for the iPad 2 at launch was "amazing," though the company declined to reveal actual sales figures. But with the device sold out virtually everywhere, one Wall Street analyst declared that Apple now has an "insurmountable lead" in the tablet market.

Apple: 'Amazing' demand for iPad 2

"Demand for the next generation iPad 2 has been amazing," Apple spokeswoman Trudy Muller told The Loop. "We are working hard to get iPad 2 into the hands of every customer who wants one as quickly as possible."

Though Apple has not revealed initial sales for the iPad 2, most locations were completely sold out by Saturday. Sales predictions have ranged from about 500,000 to as high as one million, a number that will be determined by how many units Apple was able to supply for last Friday's launch.

Deutsche Bank: Apple's lead 'insurmountable'

Analyst Chris Whitmore with Deutsche Bank said in a note to investors on Monday that he sees the blockbuster start for the iPad 2 as evidence that Apple has earned an "insurmountable lead" in the tablet market, leaving competitors in the dust.

"We believe the combination of its robust ecosystem, massive App catalog, broad carrier support, industry-leading hardware performance and its price-performance advantage creates an unmatched value for consumers in this segment," he wrote.

Whitmore conducted a survey of 100 stores, including 50 Apple retail locations, 20 Best Buy and Walmart stores, and a handful of AT&T and Verizon stores. He found a complete 100 percent stock-out of the iPad 2 at all locations polled.

The analyst said the strong start for the iPad 2 suggests his estimate of 30 million iPad sales in 2011 is "very conservative." Apple sold about 15 million of the first-generation iPad in all of 2010.

J.P. Morgan: iPad 'wannabes' must 'rethink' their tablet plans

Analyst Mark Moskowitz with J.P. Morgan also sent out a note to investors Monday in reaction to the iPad 2 launch. He believes the early success of the iPad 2 is a sign of a "global tablet bubble."

"There are many competitive tablet entrants expected, but so far, we think that both Samsung and Motorola have experienced disappointing adoption curves," he said. "We expect more of the same from other entrants.

Moskowitz expects Apple to control at least 61 percent of unit sales in the tablet market in 2011. He noted that number could go higher, given the momentum the iPad 2 saw in its debut over the weekend.

Ticonderoga Securities: 'Consumers have spoken' in favor of iPad 2

Finally, Brian White with Ticonderoga Securities issued a response to the iPad 2 launch, declaring that tablet competitors to the iPad 2 have even more of an uphill battle after Apple's tablet launched last week.

"For tablet competitors," he wrote, "we believe consumers have spoken, and life just got a lot tougher if you plan to compete with the iPad 2."

White and his team conducted field checks with stores over the weekend, and also found that every store, including Apple retail locations, were completely out of iPad 2 stock. He said the iPad 2 launch was much stronger than most likely expected, and he reiterated his prediction that first-weekend sales could reach 1 million.

"Clearly, we believe the demand was there to exceed our target," he said. "However, the question now becomes was there adequate supply."

I wouldn't be surprised if the iPad ends up with a greater percentage of the tablet market than the iPod does of the PMP market. Like the iPod, it's not a necessity whereas phones are, so people won't settle for cheap knockoffs just because they have to, not to mention that the cheap knockoffs are absolute junk and even the expensive ones are pretty bad in quality whereas some of those Android phones seem pretty good (though not built as well as iPhones, of course).

Just as Apple haters focused on the Macs and PCs even long after Jobs conceded that battle and Apple was dominating the music market, I won't be surprised if they ignore the iPad's success and keep pointing out Android's marketshare over the iPhone (as if it were a failure!). You'd think that with such massive marketshare, all the developers would have migrated from the App Store by now; they must all be fanboys drinking the Kool-Aid!

I wouldn't be surprised if the iPad ends up with a greater percentage of the tablet market than the iPod does of the PMP market. Like the iPod, it's not a necessity whereas phones are, so people won't settle for cheap knockoffs just because they have to, not to mention that the cheap knockoffs are absolute junk and even the expensive ones are pretty bad in quality whereas some of those Android phones seem pretty good (though not built as well as iPhones, of course).

Just as Apple haters focused on the Macs and PCs even long after Jobs conceded that battle and Apple was dominating the music market, I won't be surprised if they ignore the iPad's success and keep pointing out Android's marketshare over the iPhone (as if it were a failure!). You'd think that with such massive marketshare, all the developers would have migrated from the App Store by now; they must all be fanboys drinking the Kool-Aid!

While watching the iPad 2 event I wondered why Apple was making so many digs at the competition. I said to myself, they already own the market they would easily have the majority of the profit and will easily take ⅓ to ½ of the profits, like with the iPhone.

But I dont think I was thinking big enough. I think Apple wants this to the iPod all over again. A natural monopoly. They will surely make the iPad the 2nd most profitable segment of their business this year, but if they can make this another iPod in terms of marketshare despite growth it could be Apples most profitable segment in a few years.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

I wouldn't be surprised if the iPad ends up with a greater percentage of the tablet market than the iPod does of the PMP market. Like the iPod, it's not a necessity whereas phones are, so people won't settle for cheap knockoffs just because they have to, not to mention that the cheap knockoffs are absolute junk and even the expensive ones are pretty bad in quality whereas some of those Android phones seem pretty good (though not built as well as iPhones, of course).

That's a very good point. Even if someone manages to come up with a tablet that is cheaper than iPad (like has happened with alternatives to iPhones), people are more likely to wait a while longer to save the money they need to buy iPad.

I hope that the iPad is sold out/delayed because of incredible demand, not because of insufficient supply.

That's kind of a front hand/back hand thing. If they sold out because of incredible demand, that would mean they had insufficient supply. I do know what you mean though.

I've related my own experience with this Friday. 14th st Apple store in NYC. Line from 9th Ave to 10th Ave, a long block. Then up to 18th st. Someone on one of the threads here was on the same line, and said it extended to 24th st, but I can't verify that.

We're talking about a good thousand people, likely a good number more. Though the 5th Ave store gets all the publicity.

The problem for Apple in maintaining dominance in tablets is that if they can't make enough for everyone who wants one, it will give a major boost the soon-to-be bonanza of Android tablets. I can't see them maintaining this close to this kind of market share in the long run, but the market will be so big, it is still going to quadruple the size of the company.

Man, if I believe that, I should go buy more stock right now, shouldn't I?

I hope that the iPad is sold out/delayed because of incredible demand, not because of insufficient supply.

How does the non-business geek invest in tech stocks? Is it simple as going to a website? What should I look out for and how much cash is reasonable to invest in a stock like Apple and still consider it disposable? I mean, for the investment to be worth it how many shares would I have to look at buying?

I spoke with the Manager at my local Wal-Mart Saturday, and he told me that they only had 2 (TWO) iPad 2's shipped to them on Friday, with more expected in today. if they'd had 100 they could have sold all of them.

That's a very good point. Even if someone manages to come up with a tablet that is cheaper than iPad (like has happened with alternatives to iPhones), people are more likely to wait a while longer to save the money they need to buy iPad.

A lot of it depends on the apps, where Apple wins for now at least. It also depends on the performance. How well does it run those apps? Apple wins there as well for now.

I think that it's interesting that with all the talk about the Tegra 2, when all is said and done, Apple's A5, which includes the Imagination GPU, beats it hands down. That's got to be discouraging, because now Motorola and others using that chip can't say their performance is better. And what else do they have?

Cheap tablets will perform badly, and will have problems running more sophisticated games and apps. But people will buy a $250 tablet anyway, because of the price. Some will be happy, and others won't be. My daughter's friend, who, like my daughter, is a photography major, was bought a cheap, no name brand Android tablet for Christmas. She asked me if it would run the pro photo apps out there that are available for the iPad. I said no. She asked if they ever would. I told her it wasn't likely in the near future at least. She wasn't happy.

This will be a world of home based computing (mac mini's and what ever Dell/Acer/HP/sony sell), and portable computing (Hi End = SSD based laptops, Mid= 'personal internet devices', LE = 'personal comm devices' [aka smarter_than_featurephones]), and home infrastructure (TimeCapsule, AppleTV, Airport Express, free Lion Server OS, airplay and airprint)

Apple is the only company that seems to have leadership/growth/dominance/convergance across all those lines.

How does the non-business geek invest in tech stocks? Is it simple as going to a website? What should I look out for and how much cash is reasonable to invest in a stock like Apple and still consider it disposable? I mean, for the investment to be worth it how many shares would I have to look at buying?

The answers to those questions vary from person to person. One way to invest in an industry is to invest in the leading companies, the cream of the crop. Go to CNN Money online, and open a free account. Join The Motley Fool, also free. Make up lists of stocks you're interested in and track them. You will be able to see stock performance over years, look up financial information, etc. Read the free articles and reports to get some idea of what the thinking is out there, but don't take any one of them too seriously. Remember that past performance doesn't guarantee future performance.

There's a lot more detail I could give you here, but it's a start. I'm heavily invested in Apple, and I'm long, meaning that I'm holding it for at least a year, in my case several years. If I have the cash on hand, I buy more during a downturn, and don't sell when things move upwards.

How much cash can you afford to lose? That's a criterion. If it's $5,000, and you pay attention to what you're doing, then you can invest $15,000, because you would be able to abandon your position before losing a third. That's one way of looking at it.

I personally believe that GarageBand is the killer app. Thats sometimes over-used as a phrase so here is a good definition from wikipedia.

in the jargon of technologists, has been used to refer to any computer program that is so necessary or desirable that it proves the core value of some larger technology, such as computer hardware, gaming console, software, or an operating system. A killer app can substantially increase sales of the platform on which it runs.

I dont think that Android can compete.

1) They dont have the rich SDK.
2) They dont have the hardware integration.
3) They dont have the design ability to create these kinds of apps for Android. Nobody has, for iOS either, except Apple. Luckily Apple have done so.

I am assuming they haven't yet sold a million, or they would have replaced "amazing" with 1 million in Trudy's press release.

They may not know yet. BB and other third parties still have to gather all their info and pass that to Apple. We could get a number by the end of the week, unless Apple wants to wait for an end of the week total instead, Hoping to catch up a bit with backorders.

A lot of it depends on the apps, where Apple wins for now at least. It also depends on the performance. How well does it run those apps? Apple wins there as well for now.

I think that it's interesting that with all the talk about the Tegra 2, when all is said and done, Apple's A5, which includes the Imagination GPU, beats it hands down. That's got to be discouraging, because now Motorola and others using that chip can't say their performance is better. And what else do they have?

Cheap tablets will perform badly, and will have problems running more sophisticated games and apps. But people will buy a $250 tablet anyway, because of the price. Some will be happy, and others won't be. My daughter's friend, who, like my daughter, is a photography major, was bought a cheap, no name brand Android tablet for Christmas. She asked me if it would run the pro photo apps out there that are available for the iPad. I said no. She asked if they ever would. I told her it wasn't likely in the near future at least. She wasn't happy.

You're absolutely right. At the moment it's hard to see how anyone could come up with anything close to the same hardware performance for the same price. I don't doubt Samsung and Motorola will be scrambling at the moment to try and come up with a way to at least match Apple's hardware, but lets face it, they almost did that with iPad 1, but couldn't match the price, then iPad 2 came along.

Once they find a way to match iPad 2's hardware (and who knows at what cost), iPad 3 will be along.

The question is how can Motorola/Samsung et al jump two generations of iPad hardware while maintaining price parity? Even if they could match the iPad hardware performance for the same cost right now, Apple's advantage in terms of number of apps would still put the iPad as the sensible choice to buy.

Agreed. When cheap Android tablets start to undercut the iPad, then the market share will get eroded and margins compressed. That's just the way it goes.

It didnt happen in the iPod market, and it is not likely to happen here. The reason is simple - the entry level price for Apple's tablet would make it a loss leader for all other tablets if they were to use similar components. Apple can get those components cheaply because of volume, and sunk capital.

And Apple probably will be able to reduce prices by up to $100 when their new plants - or the plants they have a joint interest in with manufacturers come on line. $4B here, $4B there, and pretty soon you are talking about real money.

I personally believe that GarageBand is the killer app. Thats sometimes over-used as a phrase so here is a good definition from wikipedia.

in the jargon of technologists, has been used to refer to any computer program that is so necessary or desirable that it proves the core value of some larger technology, such as computer hardware, gaming console, software, or an operating system. A killer app can substantially increase sales of the platform on which it runs.

I dont think that Android can compete.

1) They dont have the rich SDK.
2) They dont have the hardware integration.
3) They dont have the design ability to create these kinds of apps for Android. Nobody has, for iOS either, except Apple. Luckily Apple have done so.

Oh, there are some great, and sophisticated apps out there from third parties in all categories. You'd be amazed at some of it.

Still, anything close to 1M is amazing considering that its just being sold in one country. Whatever Apple is selling on the 24th, you can double that on the 25th ( when the UK and others come online) and that list is nowhere near all the markets they sell the iPad 1 for. Just hope they can ramp.

Apple once had a tremendous lead in personal computers, now they have 3-4% of a market dominated by Microsoft Windows (92+%). Only a couple of years ago Apple seemed to have a totally insurmountable lead in smartphones, today the IPhone is #3 in the US and #4 in the world, and Android, which nobody took seriously only a year ago, is number one in the world (both in sales and total units in use). Apple is the clear leader in a market which had essentially zero competitors until about a week ago (when the Xoom came out) and it is clear that Motorola pushed the release date earlier then they wanted (Flash won't be working until this Friday and the SD card and 4G even later then that) in order to get in before the IPAd 2). But as more and more Android tablets are released with better specs then the IPad 2 (even the Xoom beats the IPad hardware in virtually every category, and better quad core units are on the way) and almost certainly lower prices, the IPad 2 is going to take a big hit. Remember that Android is free and open and works very well, and even one of those criteria would make Android tablets a serious threat to Apple.

Look Jobs wouldn't continue to harp about how fragmented and silly Android was if he wasn't worried about it. He isn't worried about Windows mobile 7 or RIM, because they suck so bad, but if Android phone and tablet sales continue to increase at their present rate (about 900% in just one year) in a few years Apple will be about as relevant in mobile computing as they are in presently in PCs. I would love to see Apple remain a serious force in mobile computing, but IPods are going to disappear soon (it just doesn't make sense to have a separate device that doesn't do anything that any smartphone can do), Macs are a tiny niche market, Iphones are losing market share rapidly to Android, and there are finally going to be competitors to IPad. If Apple doesn't open their OS to other companies then IOS will whither away, that's just a fact.

How does the non-business geek invest in tech stocks? Is it simple as going to a website? What should I look out for and how much cash is reasonable to invest in a stock like Apple and still consider it disposable? I mean, for the investment to be worth it how many shares would I have to look at buying?

'worth it?' You're definitely non-business. Talk to a financial planner. Disposable investments are all about your total portfolio and risk tolerance and not the value of a particular stock.

IMHO, Apple is likely on a 10% per year growth rate over the next 2ish year (400-450 by 2013)... that's the same (and likely less) than the S&P500 and/or Russell 2000. I'm long, and hope I'm conservatively wrong, but that's my analysis;-) My problem is that AAPL is now about 30% of my retirement portfolio. I need to rebalance, but I hate to not dance with the date that brung me.

Agreed. When cheap Android tablets start to undercut the iPad, then the market share will get eroded and margins compressed. That's just the way it goes.

That presumes they can undercut the iPad.

Remember, CES 2010 had the estimates at around $1000 with the competition undercutting that price by $200-300. The $500 iPad made them go back to the drawing board and now a year later the only shipping tablet with Android 3.0 barely beats the year old iPad in performance tests and costs $729.

Quote:

Originally Posted by wheeles

There's still the remainder of the week to announce a 1M figure, but I doubt they were able to make that many.

What hypothesis do you have to suggest they couldnt make that many? New Foxconn plant not running? The earliest known manufacture date is from only 10 days ago?

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

The Android tableteers if they for some reason want to be in the tablet game should just focus on third world demand with cheap Chinese knock-off quality devices. The WebOS tablet is probably stillborn or at the very least stunted. And Microsoft should forget their tablet dreams and focus on writing apps for the iPad instead. There's still a lot of money to be made there with Office for iOS, every school and company in the developed world will want it. Which brings them full circle to where they started out, an app writer for Apple. But this time, there's no IBM on which they can hitch their star as they did with DOS. Also, Apple will not be double crossed twice.

It's a great day to be owning AAPL. If the tablet becomes as big as PCs were, what's the limit on AAPL levels?

Oh, there are some great, and sophisticated apps out there from third parties in all categories. You'd be amazed at some of it.

yes, there are... but odds are there are more good-to-great, and nicely sophisticated apps for iOS. From a purely statistical perspective... odds are you'll find 'just enough' functionality on an iOS platform.

And this is before a 9X improvement in graphics response plays out to the developer community. Apple implicitly is at the top of the spec heap for the next 6 months. Nothing draws app developers to a platform than performance (I don't have to be so sophisticated... less time developing, more wow factor... $$$ in net profit)

Apple once had a tremendous lead in personal computers, now they have 3-4% of a market dominated by Microsoft Windows (92+%). Only a couple of years ago Apple seemed to have a totally insurmountable lead in smartphones, today the IPhone is #3 in the US and #4 in the world, and Android, which nobody took seriously only a year ago, is number one in the world (both in sales and total units in use). Apple is the clear leader in a market which had essentially zero competitors until about a week ago (when the Xoom came out) and it is clear that Motorola pushed the release date earlier then they wanted (Flash won't be working until this Friday and the SD card and 4G even later then that) in order to get in before the IPAd 2). But as more and more Android tablets are released with better specs then the IPad 2 (even the Xoom beats the IPad hardware in virtually every category, and better quad core units are on the way) and almost certainly lower prices, the IPad 2 is going to take a big hit. Remember that Android is free and open and works very well, and even one of those criteria would make Android tablets a serious threat to Apple.

Look Jobs wouldn't continue to harp about how fragmented and silly Android was if he wasn't worried about it. He isn't worried about Windows mobile 7 or RIM, because they suck so bad, but if Android phone and tablet sales continue to increase at their present rate (about 900% in just one year) in a few years Apple will be about as relevant in mobile computing as they are in presently in PCs. I would love to see Apple remain a serious force in mobile computing, but IPods are going to disappear soon (it just doesn't make sense to have a separate device that doesn't do anything that any smartphone can do), Macs are a tiny niche market, Iphones are losing market share rapidly to Android, and there are finally going to be competitors to IPad. If Apple doesn't open their OS to other companies then IOS will whither away, that's just a fact.

That may or may not be true (the fact that Apple continue to have by far the lions share of the MP3 market would suggest they are able to maintain huge market share).

If Jobs weren't paying attention to what Android is doing, Apple would have a big problem on their hands, but what he's saying is right Android is fragmented and from what I've seen of it, not very nice.

However, you're right, some people will almost certainly come along and make a cheaper tablet running Android in the same way they did with phones, and Apples market share will no doubt drop. That said, even if Apple do go from being number 1 in terms of market share to, say number 3, if numbers 1 & 2 are ultra low margin players who are getting share but not profitability, I'd rather be Apple.

The same goes with the Mac. It's better to have 10% of the market and be making decent profit margins, than let's say 20% of the market that HP might have, but on wafer thin margins.

Apple once had a tremendous lead in personal computers, now they have 3-4% of a market dominated by Microsoft Windows (92+%). Only a couple of years ago Apple seemed to have a totally insurmountable lead in smartphones, today the IPhone is #3 in the US and #4 in the world, and Android, which nobody took seriously only a year ago, is number one in the world (both in sales and total units in use). Apple is the clear leader in a market which had essentially zero competitors until about a week ago (when the Xoom came out) and it is clear that Motorola pushed the release date earlier then they wanted (Flash won't be working until this Friday and the SD card and 4G even later then that) in order to get in before the IPAd 2). But as more and more Android tablets are released with better specs then the IPad 2 (even the Xoom beats the IPad hardware in virtually every category, and better quad core units are on the way) and almost certainly lower prices, the IPad 2 is going to take a big hit. Remember that Android is free and open and works very well, and even one of those criteria would make Android tablets a serious threat to Apple.

None of that is true.

1) Apple were never ever higher than 10% of the market in computers. The Mac was a disaster. Even before the release of the IBM PC, the Apple II was a minority in the market - but it was a tiny market.
2) Only a couple of years ago Apple's share of the smart phone market was less than it is now. Nokia has always dominated that. Not being on all carriers in the US, and China is the main reason for about ( half) of Android's growth. Apple also needs to go cheaper, and have pretty much said they will. This is not the 1990s.

Deal with the actual device we are talking about. Can other manufacturers compete on price? If you think they can - explain why they can.

The problem for Apple in maintaining dominance in tablets is that if they can't make enough for everyone who wants one, it will give a major boost the soon-to-be bonanza of Android tablets.

It's foolish to think that consumers see the iPad and the knockoffs as equal in the marketplace, meaning they'll simply buy a Xoom since the iPad is temporarily sold out. The only people buying Xooms are those who are purposefully, intentionally NOT buying an iPad.

The iPod "natural monopoly" analogy is interesting and plausible, but the tablet market is still too nascent to really make that call just yet. Apple has an extraordinary lead here, and it may well be insurmountable. I personally don't see any competitor matching what Apple has to offer. Cheaper tablets will sell, but not very well. People are willing to pay for premium devices such as Apples, as evidenced by Mac sales outpacing the overall industry for the past 19 quarters.

Look Jobs wouldn't continue to harp about how fragmented and silly Android was if he wasn't worried about it. He isn't worried about Windows mobile 7 or RIM, because they suck so bad, but if Android phone and tablet sales continue to increase at their present rate (about 900% in just one year) in a few years Apple will be about as relevant in mobile computing as they are in presently in PCs. I would love to see Apple remain a serious force in mobile computing, but IPods are going to disappear soon (it just doesn't make sense to have a separate device that doesn't do anything that any smartphone can do), Macs are a tiny niche market, Iphones are losing market share rapidly to Android, and there are finally going to be competitors to IPad. If Apple doesn't open their OS to other companies then IOS will whither away, that's just a fact.

This bit is nonsense too. Obviously Android are not going to increase by 900%, the law of large numbers comes into play here. iPhone is losing no market share whatsoever - the losses are by everybody else and are taken by Apple and Android( Y-oY Apple grew 80% )- and Apple has not gone multi-carrier or cheap with the iphone everywhere. (Analysts are predicting that Android will grow it's unit base by 30% this year).

Apple probably wanted to milk the iPhone for a while longer but they admit there will be a cheap model sometime this year. What we know is that China - a big market for iPhone clones and Android machines ( i.e. iPhone clones pt II) - is really taking off for Apple, they are aware of this and will create a CDMA phone for China. And it will be cheap. The Chinese are very brand aware.